Study Uncovers Fascinating Findings about Canadian Firms’ Use of Social Media for ESG Visibility
Previous studies have determined that strong ESG performance decreases costs of capital for firms, resulting in better performance of their stocks. With investors becoming more socially and environmentally aware of the effect of their investment decisions, more are moving toward firms that align with their ideals.
This has seen some companies turn to social media as a way to share information, particularly investors in the younger generations.
A recently conducted study analyzed how ESG disclosures made by Canadian firms on social media influenced their financial performance, particularly their return on equity. The researchers began by analyzing posts on X (formerly Twitter) made between 2015 and 2022 by firms that were part of the S&P/TSX Composite Index. Of all the firms included, the researchers determined that 185 had X accounts.
Further analysis revealed that as more firms utilized social media, engagement on matters that were ESG-related by companies also rose. In 2016, less than 2% of total posts made on the platform by these companies discussed anything linked to ESG. By 2022, posts discussing this particular topic had surpassed 8%.
The researchers also observed that the number of companies using X during their sample period increased. They determined that under 10% of these companies used X in 2008, noting that by 2022, this percentage had risen to almost 80%.
The researchers were surprised to learn that firms which posted most about their ESG pledges were often the heaviest emitters of greenhouse gases. Companies in the utilities, industrials and energy sectors made up a substantial percentage of environmental posts. They also made up 95% of industrial greenhouse gas emissions of the firms analyzed.
In their report, the researchers noted that this came as no surprise as the companies were already being evaluated for their environmental performance. They then added that the efforts made by these companies to ‘greenwash’ their image on matters-ESG online didn’t help when it came to investors.
The researchers explained that they found no association between decreases in emissions and the messaging being pushed online by these companies, arguing that with the firms showing no real commitment on environmental issues, investors weren’t likely to be swayed in their favor. This meant that companies weren’t reaping any financial rewards linked to strong ESG performances either; no improved stock performance, lower costs of capital, or cheaper credit.
In their conclusion, the researchers highlighted the need for firms to bolster their ESG image by actually making a difference, noting that it’d prevent them from losing investor credibility. This study confirms that walking the talk, as many companies like First Tellurium Corp. (CSE: FTEL) (OTCQB: FSTTF) are doing, will always trump being “all hat and no cattle.”
NOTE TO INVESTORS: The latest news and updates relating to First Tellurium Corp. (CSE: FTEL) (OTCQB: FSTTF) are available in the company’s newsroom at https://ibn.fm/FSTTF
Please see full terms of use and disclaimers on the ESGWireNews website applicable to all content provided by ESG, wherever published or re-published: https://www.ESGWireNews.com/Disclaimer
Previous studies have determined that strong ESG performance decreases costs of capital for firms, resulting in better performance of their stocks. With investors becoming more socially and environmentally aware of the effect of their investment decisions, more are moving toward firms that align with their ideals.
This has seen some companies turn to social media as a way to share information, particularly investors in the younger generations.
A recently conducted study analyzed how ESG disclosures made by Canadian firms on social media influenced their financial performance, particularly their return on equity. The researchers began by analyzing posts on X (formerly Twitter) made between 2015 and 2022 by firms that were part of the S&P/TSX Composite Index. Of all the firms included, the researchers determined that 185 had X accounts.
Further analysis revealed that as more firms utilized social media, engagement on matters that were ESG-related by companies also rose. In 2016, less than 2% of total posts made on the platform by these companies discussed anything linked to ESG. By 2022, posts discussing this particular topic had surpassed 8%.
The researchers also observed that the number of companies using X during their sample period increased. They determined that under 10% of these companies used X in 2008, noting that by 2022, this percentage had risen to almost 80%.
The researchers were surprised to learn that firms which posted most about their ESG pledges were often the heaviest emitters of greenhouse gases. Companies in the utilities, industrials and energy sectors made up a substantial percentage of environmental posts. They also made up 95% of industrial greenhouse gas emissions of the firms analyzed.
In their report, the researchers noted that this came as no surprise as the companies were already being evaluated for their environmental performance. They then added that the efforts made by these companies to ‘greenwash’ their image on matters-ESG online didn’t help when it came to investors.
The researchers explained that they found no association between decreases in emissions and the messaging being pushed online by these companies, arguing that with the firms showing no real commitment on environmental issues, investors weren’t likely to be swayed in their favor. This meant that companies weren’t reaping any financial rewards linked to strong ESG performances either; no improved stock performance, lower costs of capital, or cheaper credit.
In their conclusion, the researchers highlighted the need for firms to bolster their ESG image by actually making a difference, noting that it’d prevent them from losing investor credibility. This study confirms that walking the talk, as many companies like First Tellurium Corp. (CSE: FTEL) (OTCQB: FSTTF) are doing, will always trump being “all hat and no cattle.”
NOTE TO INVESTORS: The latest news and updates relating to First Tellurium Corp. (CSE: FTEL) (OTCQB: FSTTF) are available in the company’s newsroom at https://ibn.fm/FSTTF
Please see full terms of use and disclaimers on the ESGWireNews website applicable to all content provided by ESG, wherever published or re-published: https://www.ESGWireNews.com/Disclaimer
